Total liability

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Querist : Anonymous

Querist : Anonymous (Querist)

04 November 2011 Dear Expert,

How to calculate Total Liability of the company.

Thanks in advance......

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
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04 November 2011 Determine stockholders' equity. Equity is calculated by summing the shareholders' investment and retained earnings from net income. Both can be found on the balance sheet. Retained earnings are earnings that are not distributed to shareholders. If a company does not show stockholders' equity, use retained earnings

Calculate total liabilities. Liabilities are calculated by subtracting equity from assets. The calculation is RS.10, 000 – RS.2, 000 = RS 8,000. This means that RS.8, 000 of assets are paid for with liabilities or debts to the company.

PLEASE ADD ALSO IN POINT NO.FIRST

Determine company assets. These are all things the company deems valuable and include both current and non-current assets.

Current assets (short-term) are assets that are convertible into cash within one year; and, non-current assets (long-term) are assets of a more permanent nature. Assets are usually the first section on the balance sheet.

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